Defence + Indemnity: April 2018 - IV. Practice Issues

B. An admission of liability in an action is not a formal admission binding the party making it in a subsequent action relating to the same accident, but is only evidence in the second action to be attributed such weight as the Court decides. Thus, it is not necessarily an abuse of process for the defendant who admits liability in one action to deny it in another one relating to the same accident.

The Plaintiff Glover sued her husband Leaky for a motor vehicle accident where she was a passenger in a vehicle owned jointly by both of them but being driven by Leaky. Another passenger in the vehicle, Yeomans had sued both in a separate action where Glover and Leaky were defended jointly by counsel appointed by their insurer, ICBC.

In the Glover action, Leaky denied liability and successfully sought a jury trial.

Partway through the jury trial, Glover’s counsel applied to have the Defendant Leaky’s denial of liability in his Statement of Defence struck on the basis of abuse of process. She relied on the fact that in the Yeomans action, ICBC counsel defending both Glover and Leaky had admitted Leaky’s negligence in his pleadings. The Yeomans action had settled. In the Glover action, the Plaintiff argued that it would be an abuse of process to allow Leaky to contest liability when he had admitted liability in his pleadings in another action involving the same accident. Glover’s counsel had only recently discovered the admission in the Yeomans action partway through the Glover trial.

Glover’s counsel suggested that the trial judge defer judgment on the application until the conclusion of the trial and Leaky’s counsel agreed. The Court decided that if the verdict came in finding no liability against Leaky she would postpone entering judgment until after deciding the abuse of process issue. If the verdict found liability against Leaky, she would enter judgment. The trial continued. Plaintiff’s counsel did not put Leaky’s admission in the Yeomans action to him.

The jury found no liability against Leaky. The Court found that the Plaintiff’s counsel had allowed the trial to continue without confronting Leaky about the admission due to a misunderstanding of what had been agreed to. The trial judge found that Leaky’s denial of liability was an abuse of process in light of his admission in pleadings in the Yeomans action and, further concluded that the Plaintiff had not had a fair trial because her counsel had not confronted Leaky with it. She declared a mistrial.

The Defenant Leaky appealed, arguing that his denial of liability in the Glover action was not an abuse of process and that the trial judge had erred in declaring a mistrial.

II. HELD: Appeal dismissed but mixed result, holding the denial of liability was not an abuse of process but that the trial judge’s discretion in ordering a mistrial should not be interfered with.

The Court held that the issue of striking a pleading was a question of law such that the appellate standard was that of correctness.

The Court held that an admission in one case is binding only with respect to that case. With respect to other, possibly related litigation it is admissible as evidence for that court in that other proceeding to determine how much weight to assign to it.

While the admission in the pleadings of the Yeomans case was a formal admission in that case, it qualified only as an informal admission for the purposes of the Glover case.

The court held:

[26] I am of the view that the appellant correctly says that there was no formal admission of liability in the present case; the respondent ought to have been required to establish that, in the circumstances of this case, advancing a liability defence amounted to an abuse of process. Further, in my view, there was no basis upon which the trial judge could properly have concluded that advancing a liability defence would bring the administration of justice into disrepute.

[27] The pleadings that were said to be inconsistent were admissions in a different case. The formal admission made in the Yeomans Action is only effective to bind the defendant in that case (and, arguably, then, only insofar as the trial was in progress or imminent). Rule 7 7(2) of the Supreme Court Civil Rules explicitly states that “Unless the court otherwise orders, the truth of a fact or the authenticity of a document specified in a notice to admit is deemed to be admitted, for the purposes of the action only ….” (emphasis added).

[28] As Goldie J.A. observed, in obiter, in Tunner v. Novak (1993), 1993 CanLII 2880 (BC CA), 76 B.C.L.R. (2d) 255 (C.A.), in the context of an attempt to preclude a litigant from withdrawing an admission after a summary trial, when a new trial was ordered:

27 Whether the admissions made by counsel survive the summary trial is another question. In view of the disposition I propose of this appeal it is not necessary to answer it. A cautionary note is sounded at p. 973 of The Law of Evidence in Canada, [2nd ed. (Butterworth’s: Toronto, 1992) by Sopinka, Lederman and Bryant]:

Formal admissions are only binding for the purposes of the particular case in which they are made. However, there is a conflict of authority as to whether an admission made at the first trial continues to bind when a new trial is ordered. It is submitted that an admission for the purpose of dispensing with evidence is generally intended to apply only to the trial which is in progress or imminent and not in the differing circumstances that may prevail at a new trial. Accordingly, the admission is no longer binding at the new trial in the formal sense, but may be introduced as an informal admission. The party who made the admission may, therefore, lead evidence to explain or contradict the previous statement.

. . .

[30] The appellant acknowledges that a formal admission in an action is generally admissible in other proceedings, as an extrajudicial admission – an informal, as opposed to a formal admission – and may be used to impeach one who takes an inconsistent position. Informal admissions, however, are not conclusive. In Caviglia, as in the case at bar, the court considered the effect of an admission of liability in a prior action arising out of the same motor vehicle accident. The Court reviewed competing approaches to this question, and asked:

26 Should the policy basis which underlies the conclusive effect of a judicial admission be extended to separate proceedings as the American authorities appear to suggest? I conclude that an admission of liability in a proceeding is admissible in separate proceedings but not conclusive; the weight to be given to such an admission must be determined in the particular circumstances in which it was made.

27 In this case, I.C.B.C. acted for the defendant in both actions although two different counsel were appointed to represent her. It is difficult to believe that, when I.C.B.C. instructed counsel to admit liability in the second action in March 1991, it was unaware of all of the relevant facts, witness statements, and the denial of liability made in December 1989 in this action.

…

30 I conclude that the admission of liability in the second action is admissible in this action but, in the circumstances, the weight to be given to it is negligible. There is no evidence that [the plaintiff] relied upon that admission or was even aware of it at any material time prior to trial. The admission, while perhaps passively adopted by [the defendant], was not made on her instructions or with her knowledge and the substance of that admission is contradicted by her sworn evidence at trial.

[Emphasis added by the Court]

Furthermore, the Court held that the doctrine of abuse of process, including with respect to re-litigation of the issues, is focused on preventing the administration of justice into disrepute. Re-mounting a defence can amount to an abuse of process but “[t]he court should consider the particular circumstances of the case and exercise its discretion to determine if allowing the plea to stand or the action to proceed ‘will enhance or detract from the effectiveness of the adjudicative process as a whole’” (para. 36).

In this case, it was held that allowing Leaky’s denial of liability to stand in his pleadings in the Glover case did not amount to an abuse of process:

[40] I agree with the appellant’s submission that it is important that the Yeomans Action was settled before trial. Pleadings are rarely struck as an abuse of process on the ground of relitigation unless the prior pleading has led to a judgment (which is not the case here). Even where the prior litigation has resulted in a judgment, the courts have been cautious in our application of the abuse of process doctrine to prevent relitigation: see R. v. Mahalingan, 2008 SCC 63 (CanLII), and the cases cited therein.

[41] Here, as in Caviglia, there had been no prior adjudication of the issue in question and thus the finality principle is not engaged. The jury was not reviewing evidence that had resulted in an earlier decision. No resources were wasted. There is no basis to conclude that the jury verdict would undermine the integrity of the administration of justice.

[42] The respondent’s counsel placed no weight upon the prior admission in the manner in which the litigation in this case was handled. The prior admission did not mislead or confuse the respondent’s counsel. The appellant has not reaped any advantage from the inconsistent pleading, nor were the pleadings a fraud on the court.

. . .

[45] The appellant says the approach he urges upon the Court is not only consistent with the authorities but consistent with good practice insofar as it encourages parties to make admissions and to settle claims where they should be settled, leaving them to determine where and when they wish to litigate liability. The rule binding a litigant to admissions is intended to prevent relitigation and underline the finality of judgments; the appellant says it is not offended by his approach. I agree.

[46] In my opinion, the trial judge erred in finding that the defendant had abused the process of the court simply by denying his negligence in the action at bar after admitting liability and settling another action arising out of the accident in question

Of note, the Court held that the admission drafted by the Glover/Leaky counsel in the Yeomans case, as an opinion of counsel, does not prove that his clients’ “know” that any other position is false:

[44] It is also significant that the inconsistent plea is not a positive averment, but simply a responsive statement. It cannot be said that the appellant, by denying liability in these proceedings, was pleading facts known to be untrue. As the Nova Scotia Court of Appeal noted in Mahoney at para. 21: “An opinion of solicitors based on their belief that there is strong evidence to support a proposition does not result in the client thereby ‘knowing’ that any other position is false.”

The Court decided not to interfere with the trial judge’s declaration of a mistrial, noting that “[t]he granting of a mistrial is an exercise of discretion that is not to be interfered with lightly” (para. 50):

[52] While it is clear, in my view, that there was no impropriety in this case, and certainly no blameworthy conduct on the part of the appellant, there was a basis upon which the trial judge could reasonably conclude that the course of justice had been affected by trial irregularities. It was certainly the case that the irregularity in question may have influenced the verdict of the jury (given that the case law acknowledges that a prior informal admission is admissible and may be used to cross-examine a party). It cannot be said with certainty that a properly instructed jury acting reasonably would necessarily have reached the same result if the appellant had been cross-examined on the prior admission. That is the test described in Anderson v. Maple Ridge (District) (1992), 1992 CanLII 2389 (BC CA), 71 B.C.L.R. (2d) 68 (C.A.); Jennings Estate v. Gibson (1994), 96 B.C.L.R. (2d) 342 at para. 25 (C.A.); and Tsoukas v. Segura, 2001 BCCA 664 (CanLII) at para. 73.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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